Oil prices fall further in Asia, yen gains hit Tokyo

HONG KONG: Oil prices sank further in Asian trade Monday on fears a planned cut in output will not be agreed by top producers this week, while the dollar retreated against most of its peers after its recent surge.

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Both main crude contracts slumped around four percent on Friday owing to disagreements over how to implement a reduction deal, with Iran and Iraq pressing to be excluded and Russia suggesting it will only freeze output.

News that Saudi Arabia, the kingpin of the OPEC cartel, had walked out of talks on Monday — and suggested demand will pick up in 2017 — has fanned fears a hoped-for settlement will not be reached before its twice-yearly meeting Wednesday.

“With so many toys being thrown out of their prams now in oil quota tantrums, its hard to see who will pick them all up by Wednesday’s deadline,” Jeffrey Halley, senior market analyst at OANDA, said in a note.

In early trade Monday Brent and West Texas Intermediate were down almost one percent.

The losses weighed on energy firms, with Australia’s Woodside down 2.5 percent, Tokyo-listed Inpex losing almost two percent and CNOOC in Hong Kong off 1.2 percent.

Despite the losses most regional stock markets were up, extending last week’s gains on bets Donald Trump’s spending plans will ramp up growth in the US economy.

– Hong Kong-Shenzhen link –

Hong Kong added 0.4 percent with dealers welcoming Friday’s announcement that a long-delayed link-up between the bourse and Shenzhen’s market will start on December 5. Shenzhen, however, was only marginally higher, while Shanghai was up 0.5 percent.

The scheme will give Hong Kong traders access to the mainland’s second stock exchange, the world’s eighth largest with a market capitalisation of $3.3 trillion as of September.

The tie-up follows a similar “stock connect” between Shanghai and Hong Kong launched two years ago, which gave foreigners new access to Chinese companies not quoted elsewhere, and enabled mainlanders to trade in Hong Kong.